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IBM chief receives $4.5 million bonus

Big Blue CEO Sam Palmisano saw his salary and bonus jump in 2002, while outgoing Chairman Lou Gerstner toted up more than $16.3 million, according to regulatory documents.

IBM CEO Sam Palmisano saw his salary and bonus jump in 2002, while outgoing Chairman Lou Gerstner took home more than $16.3 million in pay, bonus and stock grants, according to regulatory documents filed Monday.

Palmisano, who ascended to the chief executive role in March of last year, earned a $1.4 million salary in 2002 and was given a $4.5 million bonus as well as the option to buy 300,000 shares at $97.59 a share. That's up from the $1.1 million salary and $3 million bonus Palmisano received in 2001.

Gerstner, who retired as CEO at the end of February 2002 and stepped down from the chairman's role at the end of December, earned a $2 million salary, a $1.5 million bonus and $12.9 million in restricted stock last year. In 2001, Gerstner received the same $2 million salary but had an $8 million bonus and no restricted stock award.

Other IBM executives received roughly the same pay and bonus as in 2001, according to the company's annual proxy statement filed with the Securities and Exchange Commission.

"In 2002, IBM invested its salary increase dollars in nonexecutive employees' pay and did not provide merit base pay or target incentive increases to its executives, other than to reflect promotions or other significant job changes," Big Blue said in the filing. "These actions reflected the company's priorities in a challenging business environment."

The company also noted that despite the downturn in the tech industry, "IBM gained or held market share in its key strategic businesses in 2002."

Senior Vice President Nick Donofrio, who heads IBM's technology and manufacturing operation, received a $550,000 salary and $565,000 in bonuses, along with options to buy 60,849 shares. That represents the same salary and a slight decline in bonus from 2001, along with a slight increase in the number of options awarded.

Chief Financial Officer John Joyce received a $550,000 salary in 2002, up from $518,750 the year before, with his bonus dropping to $550,000 from $650,000. He was also given the option to buy 68,700 shares, up from 60,000 options granted in 2001.

Meanwhile IBM Global Services head Doug Elix earned a $985,000 salary and bonus, down from $1.01 million in 2001, while software head Steve Mills earned $900,000 in salary and bonus, down from $1.08 million. Both received an increase in the number of options from 2001.

Vice Chairman John Thompson, who retired Sept. 1 of last year, was given a $666,667 salary and a $470,000 bonus, down from a $1 million salary and a $1.13 million bonus awarded in 2001.